A Tale of Two Deaths

Hugo Chavez and Margaret Thatcher, two iconic statespeople of our age, representing fundamentally opposing world views, have died. Their deaths have sparked passionate feelings, for and against. Doubtless, history will remember them as two great figureheads in world politics.

This contrasted with the reactions from the public themselves. Across Venezuela there were mass public scenes of grief, with few openly revelling in the death of the President. There was even a candlelight vigil for Chavez in London. A month later, long-planned street parties erupted in towns and cities that residents claimed Thatcher had destroyed.

Neoliberalism’s economic basis is in the work of Milton Friedman and Friedrich Hayek. Friedman was close to both Thatcher and Ronald Reagan. Often discussed but rarely defined, for World Bank economist John Williamson, its key features are:

* Fiscal discipline

* A redirection of public expenditure priorities toward fields offering both high

* economic returns and the potential to improve income distribution, such as

* primary health care, primary education, and infrastructure

* Tax reform (to lower marginal rates and broaden the tax base)

* Interest rate liberalization

* A competitive exchange rate

* Trade liberalization

* Liberalization of inflows of foreign direct investment

* Privatization

* Deregulation (to abolish barriers to entry and exit)

* Secure property rights.

Critics argue that these policies have the effect of transferring control of the economy from institutions which, in theory at least, have the well-being of society as their primary goal to entities only concerned with profits. Under neoliberalism, humans have no inalienable rights, only what they achieve on the markets. Thus, rights enshrined in the United Nations Charter, such as the right to water, to healthcare and an adequate standard of living, are outdated, “a letter to Santa Claus”, in the words of Jeane Kirkpatrick, former US Ambassador to the UN.

While Rand is scornful of religion and established morality, many socialists see it as a crucial part of their beliefs. Tony Benn, former candidate for leader of the British Labour Party, Thatcher’s bête noir, and vocal supporter of Chavez, states that his socialism comes from the book of Genesis:

“When Cain killed Abel and the Lord had a word with him about it, Cain said : “Am I my Brother’s keeper?’. He was talking about equality. The idea that I have an equal responsibility for my neighbour or my brother has reappeared in a whole range of different forms over the years – “an injury to one is an injury to all, “united we stand, divided we fair, “love thy neighbour as thyself.”

Similarly, Chavez affirmed that “I am a Christian, I believe that Christ and the authentic Christian tendencies have much to contribute to the 21st century socialist project”.

Chavez defined his 21st century socialism at the World Social Forum in 2006:

“There is hardly any time left: socialism or death, but real death— of the entire human species and of life on planet earth, because capitalism is destroying the planet, capitalism is destroying life on earth, capitalism is destroying the ecological equilibrium of the planet. The poles are melting, the seas are heating up, the continents are sinking, forests and jungles are being destroyed, rivers and lakes are drying up; the destructive development of the capitalist model is putting an end to life on earth. I believe it’s now or never.”

But Chavez was quick to distance the movement from previous failed attempts and from dogmatic ideologies of the past:

“We are not talking about copying models, I believe that copying models was one of the great errors of the socialist attempts of the 20th century, following the handbook. No, with this autonomy, with this diversity, with this force originating from every community, from our people.”

Today, more than 360 million Latin Americans live under left-wing governments dubbed “the Pink Tide” by Western intellectuals (perhaps because they couldn’t stomach the word “red”). They are not homogeneous, they range from the eco-socialism of Morales in Bolivia, to Ecuador’s radical young economist, Correa to the Workers’ Party and Lula in Brazil, but basic principles of equality and integration unite them. Critics claim a reliance on state leads to corruption and inefficiency, and that enforced collective action is an attack on the pure liberty of the individual.

It is not by chance that an anti-neoliberal agenda has developed in Latin America. It was in the “Empire’s Workshop” where Thatcher and Friedman’s ideas were first implemented. After overthrowing President Allende, a democratic Marxist who stood for many of the same things Chavez did, dictator General Pinochet invited protégés of Friedman and Hayek to Chile. There, they had free reign to carry out their ideas, thanks to the General’s brutal suppression of the population. The result was not dissimilar to the West today: soaring unemployment and poverty, falling industrial production and purchasing power falling to just 40% of what it had been in 1970, coupled with a rise in wealth and power of a small section at the top of society.

Hayek recommended Chile as a model for Thatcher to follow. She agreed Chile to be an “economic miracle”, but lamented that Britain’s “democratic institutions and the need for a high degree of consent” made “some of the measures” taken “quite unacceptable”.

Likewise in Venezuela, President Carlos Andres Perez, on instruction from Friedman’s students, imposed a sweeping austerity “packet” on Venezuela, privatizing state-owned assets and removing price controls on oil, plunging the population into poverty, to the point where ordinary Caracas residents spent more than 25% of their income on bus fares (Jones, p116). This despite running on an anti-neoliberal ticket, calling the bankers and economists “genocide workers in the pay of economic totalitarianism” during his election campaign.

Desperate Venezuelans began rioting for food, but their protest soon became one against the system itself. The government acted quickly. The military was called in, surrounded the poor quarters of the city, and commenced three days of war against its inhabitants. The L.A. Times’ Bart Jones speaks of Red Cross workers being gunned down in the street, “mass graves” being filled with “mutilated corpses”, “tied up corpses” with “bullets in the back of their heads” and children being gunned down as the armies fired indiscriminately into shanty towns (Jones, Hugo! pp. 121-124). Perhaps 3,000 were killed, a similar number to the Tienanmen Square crackdown, in a country with a population more than 40 times smaller.

So it was not in Seattle, but in Caracas where the first direct protest against neoliberalism occurred. And it was the outrage at the brutal suppression of the people which spurred Chavez onto the political stage. Latin America is ten to twenty years ahead of the West, in economic terms. After decades of brutal neoliberal austerity, an alternative has emerged and fought back. Similar ideas have begun to appear in the West, thanks to the Occupy Movement, which swept America and Europe last year. Those in the West has much to learn from the region, even if it is what not to do.

The Guardian released a piece on the legacy of Margaret Thatcher. It showed a 65% increase in British poverty, from 13 to 22% of the population. Inequality, as measured by the GINI index, rose from .253 to .339. The planned destruction of the manufacturing industry led to record high unemployment. The irony of Thatcherism is that her policies have left far more people dependent on the welfare state than previously.

In contrast, even Thatcher’s allies at the World Bank admit that Chavez managed a 50% decrease in poverty, and a 65%decrease in extreme poverty. Their figures show too that unemployment fell from 14.5% in 1999 to 7.6% in 2009. Venezuela’s inequality has dropped from .487 in 1998 to .392 in 2009. Today, it is the most admired country in Latin America. A similar story is being played out in other Latin American countries.

For all this, Thatcher was remarkably successful in shifting the political discourse to the right. Her policies of privileging business led to record corporate profits and increased concentration of media ownership. Socialists like Tony Benn were pushed to one side and Tony Blair became leader of a “New Labour”, largely indistinguishable from the Conservatives. When asked what she thought was her greatest achievement was, Thatcher responded “Tony Blair and New Labour”. Benn agreed, ruefully.

The concentration of money has led to the rightward shift of the media, too. The “free-market” has led to independent media bought up or swamped by massive conglomerates. Media outlets are increasingly beholden to corporations for advertising. Today, questioning neoliberalism is heresy, leading to even supposedly left-of-centre newspapers wondering if we should be “worried by the rise of the populist left in Latin America”. It is becoming increasingly hard to hide the successes of countries of Latin America in solving age old problems by bucking the supposed iron rules of neoliberal economics. But the media continues to try. The New York Times bemoans Chavez’s “irresponsible handouts”, while the Washington Post insists he remains in power only by “showering the poor with gifts”. What are these gifts? The Telegraph finally enlightens us: “lavishing state funds” on projects like operations to restore sight to the blind and soup kitchens. Such is the aversion to the state in Western intellectual culture that providing even basic food and medicine, in accordance with the UN Declaration of Human Rights, are serious transgressions on freedom. This has been lampooned by FAIR, in their article “Chavez Wasted his Money on Healthcare When He Could Have Built Gigantic Skyscrapers”.

Despite Thatcher insisting that “there is no alternative”, Latin America is providing a model for a different future. A silent battle for heaven and Earth is being waged. And we all must choose sides. Which one are you on? Choose wisely, because the fate of the 21st century will be decided on which one of these ideologies prevails.